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London — As the UK tries to bolster North Sea output with tax reforms and support for exploration, Andy Samuel, chief executive of regulatory body the Oil and Gas Authority, set out his views in an interview with S&P Global Platts.

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He highlighted unprecedented levels of information and data provided to explorers and maintained that 10 billion-20 billion barrels of resources remain.

Q: Will investment decisions made since the price crash -- such as the Hurricane Energy project west of the Shetland Islands or Maersk Oil's Culzean project -- be enough to maintain stable North Sea production into the 2020s, or is a drop at the start of the next decade inevitable, given the long timeframes for projects?

A: In the last two years, production has increased from 1.4 million b/d of oil equivalent in 2014 to 1.7 million boe/d in 2016. Over this period we have also seen a substantial 2.1 billion barrels added to our base forecast and in total we estimate 10-20 billion barrels of remaining potential resources. This year there have been a string of new start-ups coming online with further start-ups expected for the remainder of this year and next. The outlook for 2018 activity is looking steady, with Final Investment Decision consents expected including new Field Development Plans already submitted and under discussion.

(The OGA published new projections in October showing UK oil output resuming its long-term decline in 2020. Under the projections, oil output falls to 990,000 b/d in 2020 from 1.05 million b/d in 2019, and to 590,000 b/d in 2030. It also forecast falling investment, from GBP6.5 billion ($8.7 billion) in 2017 to GBP2.5 billion in 2022.)

Q: Do you see any changes that might support investment, beside cost-cutting efforts and the fiscal framework?

A: The OGA has focused on creating the right conditions with government support to help the industry succeed amid difficult market conditions. We have worked closely with government to provide incentives to reinvigorate investment, which included GBP2.3 billion of fiscal and GBP40 million of seismic packages, making the UK continental shelf a globally competitive region. As announced just recently in the Budget, the Treasury's innovative measure on transferable tax histories [to ease decommissioning] will help promote further activity.

A key priority is to revitalize exploration through implementing a licensing regime that encourages high levels of exploration, using data, analysis and insights. We've made huge strides in making comprehensive and quality data available -- the 30th Offshore Licensing Round opened in July 2017, offering acreage in the more mature areas, with some licenses being made available for the first time in 40 years. This has been supported by a massive suite of information and data packs to help inform decision makers -- quite unlike anything that has been done in the past.

The response has been very strong, with 96 applications for 239 blocks from 68 companies. The OGA has identified many billions of additional barrels across the UK Continental Shelf -- from the West of Shetland all the way down to the mature Southern North Sea. We have published guidance on the use of Area Plans to help improve industry collaboration and maximize the economic recovery of oil and gas. A number of principles are set out in our stage gate framework, describing how economic recovery should be maximized in a particular geographical area of the UK continental shelf. We see a prize of 4 billion boe in the seven areas we have initially prioritized.

Industry has done much good and hopefully sustainable work on efficiency, supported by the Efficiency Task Force and there is further to go.

Q: Do you see an economic rationale for ultra-heavy oil projects such as Kraken, Bressay or Bentley at current oil price levels, or is the Kraken field (approved before 2014), the last of its kind for some time?

A: It is acknowledged that heavy oil fields projects can be technologically and financially challenging. Technology has a key role to play in supporting [the Maximizing Economic Recovery strategy]. The deployment of existing and new technology solutions can extend the life of mature fields and reduce their eventual decommissioning costs. It can also enable and improve the economics of many new, smaller or technically challenged fields such as heavy oil.

Q: What are you doing to ensure strategic infrastructure such as Sullom Voe or the Forties pipeline are properly managed following the transfer of operatorship from legacy owner BP? Are you confident the transfer of Sullom Voe operatorship to EnQuest should go ahead despite that company's difficulties in the downturn?

A: The OGA has robust processes in place for looking at license and pipeline transfers and changes of operatorship. As appropriate these will include a review of technical and financial capability and consultation with the Department for Business, Energy and Industrial Strategy, who retain responsibility for decommissioning liabilities and the environment. We work closely with current and new owners through our tiered reviews, as set out in our Asset Stewardship strategy. The Energy Act 2016 also gives the OGA the power to attend certain external meetings detailed in our Statutory Notice. Attendance at such meetings, further allows the OGA to gain an oversight of the management of critical infrastructure, joint venture alignment and key operational and investment matters.

Q: What are the challenges and opportunities for companies cooperating to boost the effectiveness of gas production in the southern North Sea?

A: Over the past two years, the OGA has been working to promote and develop the remaining potential in the Southern North Sea (SNS). The authority has established strong links with the East of England Energy Group as a means to mobilize both operators and suppliers. The priorities of this active group include accessing the tight gas potential and good progress has been made over the last 12 months. Alongside such priorities, the OGA is working closely with operators to progress new developments and re-developments, as infrastructure is optimized across the SNS. The OGA has a couple of active Area Plans in the SNS, including the West Sole Catchment Area, where operators are working and collaborating closely to develop otherwise marginal discoveries. As published in the OGA's Tight Gas Strategy we see the potential for some 30 wells to be drilled over the next three to four years on tight gas plays.

Q: Could there be more gas developments in the West of Shetland area (where Total has been effective but investment may be drying up) given the low price environment, and what can the UK do to promote interest in these more frontier plays?

A: The OGA has identified a number of gas prospects in the West of Shetland, both adjacent to and remote from existing infrastructure. The OGA brings together parties in geographic proximity, to highlight the opportunity of joint developments. Where existing infrastructure exists, the OGA influences licensees with nearby acreage to mature those prospects such that infrastructure owners can compete for the business. Where required the OGA uses its powers of Third Party Access to ensure maturation and development of such prospects.

--Nick Coleman, Paul Hickin, Stuart Elliott,

--Edited by Maurice Geller,